November 28, 2005

China's central bank seeks support for bird flu-hit companies

China's central bank Monday asked financial institutions to support companies hit by bird flu by extending loans, and exempting them from fees on overdue loans.

The People's Bank of China also said the government would subsidise the interest payment on loans between Nov 1, 2005 and June 30, 2006, taken out by certain qualified companies to fund measures against bird flu.

The notice by the central bank came as more and more cases of bird flu hit companies in China's poultry industry.

Financial institutions should play a role in supporting efforts to prevent bird flu and to maintain social and economic stability, the central bank said in the statement.

The bank also said it would increase its buybacks of securities from commercial banks in bird flu-hit areas to meet demand for liquidity when necessary.

This was the first time the central bank had issued a separate notice on the bird flu outbreak.

Friday, the Agricultural Ministry said a new bird flu outbreak had been found in the northern Inner Mongolia region, bringing the total number of outbreaks in China in recent weeks to at least 22.

China, which has the world's largest number of chickens, has called bird flu a "serious epidemic." Outbreaks in poultry are being reported almost daily.